Calcutta High Court (Appellete Side)
Fingertips Solutions Pvt. Ltd vs Dhanashree Electronics Limited on 27 April, 2016
Author: Samapti Chatterjee
Bench: Samapti Chatterjee
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL CIVIL JURISDICTION
APPELLATE SIDE
Present: The Hon'ble Justice Samapti Chatterjee
C.O. 3955 of 2015
Fingertips Solutions Pvt. Ltd.
Vs
Dhanashree Electronics Limited
For the Petitioner : Mr. Biswajit Bhattacharya, Learned Senior
Advocate
Mr. Probal Mukherjee, Learned Senior
Advocate
Mr. Malay Dhar, Learned Advocate
Mr. Biswajit Sarkar, Learned Advocate
For the Respondents/
Opposite Parties : Mr. Jishnu Saha, Learned Senior Advocate
Mr. Siddhartha Lahiri, Learned Advocate
Ms Sonal Shah, Learned Advocate
Mr. Shruti Agarwal, Learned Advocate
Heard on : 30.11.2015, 29.01.2016, 04.02.2016 &
05.02.2016.
Judgment on : April 27, 2016.
Samapti Chatterjee, J.
1. The petitioner/claimant/award holder filed the present revisional application assailing order no.28 dated 29th September, 2015 passed by the Learned Civil Judge (Senior Division) 2nd Court at Barasat in Miscellaneous Case No.81 of 2015 arising out of Arbitration Execution Case No.63 of 2013.
2. The key issue involved in this revisional application is whether the Executing Court can entertain an application under Section 47 of the Code of Civil Procedure raising objection as to the execution , discharge and satisfaction of an award in the nature of a decree? Further issue involved in the present revisional application is whether such a decree is non-est or in other words is a nullity and whether the Executing Court is empowered to make a declaration to that effect ?
FACT OF THE CASE
3. The brief case of the claimant/award holder/petitioner is that the petitioner being a Private Limited Company entered into an agreement with the opposite party on 26th September, 2003 whereby the petitioner was provided with a commercial space with super built-up area of 2900 sq.ft along with two car parking spaces and all other facilities at Block-EP and GP, Salt Lake, Sector-V, Kolkata-91. In the said agreement there was an arbitration clause. Since some disputes and differences arose between the parties the petitioner as per the arbitration clause contained in Clause 16 of the said agreement on 26th September, 2003 sent a letter under registered post to the opposite party on 18th September, 2007 thereby invoking the arbitration clause by nominating the Arbitrator and requiring him to enter upon the reference.
The sole arbitrator issued notices to both the petitioner and the opposite party requesting them to be present on 18th December, 2007 at the venue mentioned therein for taking steps for arbitral proceeding. The petitioner entered appearance and made their submission before the Learned Arbitrator but none appeared on behalf of the opposite party despite receipt of the notice issued by the Arbitrator. The petitioner filed their statement of claim and served copy of the statement of claim upon the opposite party but opposite party neither filed statement of defence nor attended the arbitration proceeding.
Since the opposite party failed and neglected to enter appearance in the reference despite notice and contested the claim the Learned Arbitrator proceeded with the arbitration proceedings.
Ultimately Learned Arbitrator after considering all aspects of matter and materials on record on 21st March, 2013 passed an award directing the opposite party to pay a total sum of `4,91,09,700/- to the claimant/petitioner within a period of 30 days from the date of receipt of the copy of the award and in default the opposite party was to pay interest at the rate of 18 per cent per annum till recovery by holding that the claimant/petitioner suffered loss and damages to the extent of `4crores and is entitled to an interest of `85,00000/-.
It was also held by the Learned Arbitrator that the claimant/petitioner is further entitled to legal expenses and the cost of arbitration proceedings for 38 sittings assessed at `3,09,700/- and `3,00000/- for incidental expenses.
The said award was duly communicated to the opposite party on 5th April, 2013 but the opposite party failed to comply with the award passed by the Learned Arbitrator. Therefore, due to non-payment of the awarded amount the petitioner filed an application on 12th September, 2013 for execution of the arbitration award under Section 36 of the Arbitration & Conciliation Act, 1996 following the procedure prescribed in Order 21 Rule 11 of the Code of Civil Procedure, 1908 before the Learned Civil Judge (Senior Division) 2nd Court, Barasat which was registered as Arbitration Execution Case No.63 of 2013.
The petitioner also moved an application under Article 227 of the Constitution of India praying for expeditious disposal of the said Arbitration Execution Case and this Hon'ble Court by Order dated 2nd April, 2015 was pleased to dispose of the said revisional application directing the Learned Court below to dispose of the Arbitration Execution Case within one month. Pursuant to the said direction the Learned Court below took up the hearing of the Arbitration Execution case and vide order dated 10th July, 2015 issued order of attachment of movable and immovable property of the opposite party. Subsequently by order dated 24th July, 2015 Learned Court below issued two warrants, one for attachment of movable property and another for attachment of immovable property of the opposite party.
On 21st July, 2015 the opposite party filed a Misc. Case being No.67 of 2015 under Section 47 read with Section 151 of the Code of Civil Procedure, 1908 before the Learned Civil Judge (Senior Division) 2nd Court at Barasat questioning the jurisdiction of the sole Arbitrator to pass the award and validity or the legality of the such award and prayed for dismissal of the Execution case and/or rejection of the execution application. The opposite party also prayed for recalling the orders of attachment.
Learned Court below by order dated 17th August, 2015 rejected the said application. The opposite party filed another application under Section 47 of the Code of Civil Procedure, 1908 praying for declaration that arbitral award dated 21st March, 2013 is non-est and the arbitration execution proceeding arising out of such arbitral award is also invalid and also prayed for vacating all interlocutory orders including the orders of attachments of movable and immovable property of the opposite party.
The petitioner/award holder/claimant filed a written objection interalia contending that once the arbitration award was passed and attained finality in the absence of any challenge to the said award the Learned Trial Court has got no jurisdiction to go behind the decree vis a vis the award.
It was also contended that the arbitration proceedings was duly instituted and continued with due compliance of the provisions of the Act with notice duly served upon the opposite party who chose not to contest the claim and the proceeding, therefore, when Execution Case was being proceeded with and the order of attachment have been passed, the Executing Court has no jurisdiction to entertain and decide the question of invalidity and illegality of the award.
The Learned Court below by order dated 29th September, 2015 allowed the second application under Section 47 of the Code of Civil Procedure, 1908 and vacated all interlocutory orders and the writ of attachment issued by the said Learned Court below was also recalled. Learned Court below also held that the said order does not attract the principle of resjudicata even after dismissal of 1st application on merit being Misc. Case No.67 of 2015.
It was also held by the Learned Court below that the arbitral award suffers from inherent lack of jurisdiction and therefore, it was void ab initio, a nullity and non-est and thus the said award dated 21st March, 2013 was also held to be not executable and/or not enforceable in the law. Thus virtually the Learned Court acted as the appellate authority of its own order dated 17th August, 2015.
SUBMISSIONS OF THE LEARNED ADVOCATES
4. Mr. Biswarup Bhattacharya, learned Senior Counsel appearing for the petitioner contended that the second application under Section 47 of the Civil Procedure Code is barred.
5. Mr. Bhattacharya further urged that the first application filed by the opposite party questioning the jurisdiction of the Court was turned down by the Learned Civil Judge (Senior Division), 2nd Court, Barasat by holding that said Court had pecuniary jurisdiction and the Learned Court also passed order of attachment on the execution application filed by the petitioner/award holder. Therefore, by entertaining the 2nd application under Section 47 of the Civil Procedure Code holding that the award passed by the sole Arbitrator is patently wrong and illegal the Learned Court below was clearly wrong and acted without jurisdiction. Once the Learned Judge disallowed the application under Section 47 of the Civil Procedure Code holding that the Court had the jurisdiction to entertain the execution proceedings then the Learned Court had no authority to hold a totally contrary view that the Learned Arbitrator has no jurisdiction to pass the award or the award was illegal. Legality and validity of the award could not questioned in the execution proceeding of the award nor the Court executing the award qua decree had any jurisdiction to entertain and decide such question.
6. Mr. Bhattacharya further vehemently urged that in the proceedings before the Learned Arbitrator time to time notices were issued to the opposite party/award debtor who chose not to appear before the Learned Arbitrator.
7. Mr. Bhattacarya also strongly submitted that if the opposite party does not accept the appointment of the Learned Arbitrator then it was the duty of the opposite party to file an application under Section 16 (5) of the Arbitration & Conciliation proceedings before the said Arbitrator ventilating their grievances in that respect challenging the competence of the arbitral tribunal which they failed to do.
8. Mr. Bhattacharya further contended that the opposite party also did not take recources to Section 34 of the Arbitration & Conciliation Act 1996 challenging the award before the Court. He submitted that the opposite party without participating in the arbitration proceedings and also without taking out any application challenging the award as per procedures provided under 1996 Act, only at the execution proceedings took out the first application under Section 47 of the Civil Procedure Code before the Learned Civil Judge (Senior Division) 2nd Court, Barasat which was turned down and thereafter took out, the 2nd application also under Section 47 of the Code which was barred by law and in any event the Court below had no jurisdiction to entertain the same.
9. Mr. Bhattacharya further submitted that award passed by the arbitral tribunal is not a decree but as per section 36 of the Act' 1996 the award could be enforced under the Civil Procedure Code in the same manner and if it were a decree of Court. In support of his contention Mr. Bhattacharya relied on a Supreme Court decision reported in 2006 (13) SCC Page-322 (Paramjeet Singh Patheja vs ICDS Ltd) Paragraphs- 20,21,40,42 & 43.
10. Mr. Bhattacharya further contended that Section 47 of the Civil Procedure Code cannot take away and/or override the rights and privileges provided under Section 5, 16, 34, 36, 37 of the Arbitration Act, 1996.
11. Mr. Bhattacharya further vehemently argued that second application under Section 47 of the Civil Procedure Code was barred under Order II Rule 2 of the Civil Procedure Code as no previous leave was obtained.
12. Mr. Bhattacharya further contended that on the facts of the case also the second application filed under Section 47 of the Civil Procedure Code was clearly barred and the Court below had no jurisdiction to entertain the same.
13. Mr. Bhattacharya contended that it was the duty of the opposite party to challenge the competence of the arbitral tribunal by filing application under Section 16 of the 1996 Act or approach the Court by filing application under Section 34 of the 1996 Act after the award. But in the case in hand nothing was done. In support of his contention Mr. Bhattacharya relied on a Supreme Court decision reported in 2005 (8) SCC Page-618 (SBP & Co. Vs Patel Engineering Ltd And Another) Paragraphs-45, 46, 47 and Sub Paragraphs (iv),(v), (vi), (ix) of the Paragraph-47 which are quoted below :-
"Para-47-(iv)-The Chief Justice or the designated Judge will have the right to decide the preliminary aspects as indicated in the earlier part of this judgment. These will be his own jurisdiction to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the designated Judge would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the designated Judge.
(v) Designation of a District Judge as the authority under Section 11 (6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act.
(vi) Once the matter reaches the Arbitral Tribunal or the sole arbitrator, the High Court would not interfere with the orders passed by the arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 37 of the Act or in terms of Section 34 of the Act.
(ix) In a case where an Arbitral Tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the Arbitral Tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act."
14. In support of his contention that a party who chooses not to appear before the arbitral tribunal and the award is passed, then files an application for setting aside award under Section 34 of the said Act of 1996 then the party has to make out an exceptional case for not approaching the arbitral tribunal, Mr. Bhattacharya relied on a Supreme Court decision reported in 2007 (5) SCC Page-38(Gas Authority of India Ltd And Another vs Keti Construction (I) Ltd And Others) Paragraphs-19 and 25. Some extract of the Paragrap-19 and Para-25 are quoted below:-
"Para-19-Respondent 1 did not at all appear before the arbitrator appointed by Appellant 1. Respondent 1 neither filed any state of claim nor raised any plea of jurisdiction before the arbitrator. Section 16 of the Act says that the Arbitral Tribunal may rule on its won jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement. In Konkan Rly Corpn. Ltd v Rani Construction (P) Ltd in para 21 a Constitution Bench of 5 Learned Judges has ruled that if the Arbitral Tribunal has been improperly constituted, it would be open to the aggrieved party to require the Arbitral Tribunal to rule on its own jurisdiction in view of Section 16 of the Act. It was also observed that the expression used in sub section (1) that the "Arbitral Tribunal may rule on any objections with respect to the existence or validity of the arbitration agreement" shows that the Arbitral Tribunal's authority under Section 16 is not confined to the width of its jurisdiction, but goes to the very root of its jurisdiction and there is no impediment in contending before the Arbitral Tribunal that it had been wrongly constituted. This decision has been party overruled on another point by a larger Bench of 7 Learned Judges in SBP & Co v Patel Engg. Ltd but the aforesaid view has not been dissented from or reversed. This will be evident from the conclusions arrived at by the larger Bench which have been summarised in Para 47 of the Report and sub-para (ix) thereof reads as under : (SCC p-664). Para-25- Where a party has received notice and he does not raise a plea of lack of jurisdiction before the Arbitral Tribunal, he must make out a strong case why he did not do so if he chooses to move a petition for setting aside the award under Section 34 (2) (a) (v) of the Act on the ground that the composition of the Arbitral Tribunal was not in accordance with the agreement of the parties. If plea of jurisdiction is not taken before the arbitrator as provided in Section 16 of the Act, such a plea cannot be permitted to be raised in proceedings under Section 34 of the Act for setting aside the award, unless good reasons are shown."
15. Mr. Bhattacharya further vehemently urged that after receiving notice from the Sole Arbitrator it was the duty of the opposite party to inform the Sole Learned Arbitrator in writing that they have not given any consent to the appointment of the Arbitrator but in the present case the opposite party after receiving several notices from the Learned Arbitrator regarding the proceedings chose not to appear before the Learned Arbitrator nor filed any application under Section 16 of the Act' 1996 challenging the competence of the arbitral tribunal and thereby allowed the Learned Arbitrator to proceed with the arbitration and pass the award. Further even after passing of the award opposite party also did not choose to challenge the award before the Hon'ble Court by filling application under Section 34 but the opposite party chose to sit tight and did nothing and only at the time of execution they filed one after another applications under Section 47 of the Civil Procedure Code which such the second application was barred by res judicata. In support of his contention Mr. Bhattacharya relied on a Supreme Court decision reported in 2013 (3) MhLJ ( Zenith Fire Services (India) Pvt. Ltd. Mumbai vs Charmi Sales, Ahmedabad) Page-623.
16. Mr. Bhattacharya reiterated that since the opposite party failed to avail any of those recourses then at the stage of execution they have no right to challenge the jurisdiction of the Arbitrator by filing application under Section 47 of the Civil Procedure Code. In support of his contention Mr. Bhattacharya relied on a Supreme Court decision reported in 2014 (13) SCALE: Paragraphs 15 and 16 ( M/s MSP Infrastructure Ltd vs M.P Road Devl. Corp. Ltd) Page-601.
17. Finally, Mr. Bhattacharya contended that in the Article 227, the High Court has ample power to quash any order passed without jurisdiction . In support of his contention Mr. Bhattacharya relied on a Supreme Court decision reported in AIR 2003 (SC) Page-3044 ( Surya Dev Rai vs Ram Chander Rai and Others). Therefore, in conclusion Mr. Bhattacharya submitted that this Hon'ble Court should quash and set aside the impugned order dated 29.02.2015 by allowing the present revisional application.
18. Per contra, Mr. Jishnu Saha, learned senior Advocate appearing for the opposite party submitted that on the question of jurisdiction res judicata does not apply.
19. Mr. Saha strongly contended that second application under Section 47 of the Civil Procedure Code cannot be assailed as res judicata because in the first application Court decided that it had the jurisdiction to entertain the execution application but in the second application Court decided the question of the jurisdiction of the Sole Arbitrator to pass the award though this issue was raised before the Court in the first application but unfortunately that issue was not decided. Therefore, for the decision on the issue of jurisdiction of Arbitrator the second application under Section 47 of the Civil Procedure Code was filed which cannot and should not be held to be barred by principles of res judicata.
20. Mr. Saha also vehemently urged that res judicata is a matter of procedure. In support of his contention Mr. Saha relied on a Supreme Court decision reported in 1990 (1) SCC Page-193 (Sushil Kumar Mehta vs Gobind Ram Bohra (dead) Through His Lrs.) Paragraphs-26 & 27.
21. Mr. Saha also contended that in the agreement there is no provision that other party is bound to appear before the Arbitrator of whose appointment he has not given any consent. Mr. Saha also referred to Section 11 Sub Section 5 of the Arbitration Act, 1996. He relied on a Supreme Court decision reported in 2005 (9) SCC Page-689 (Dharma Prathishthanam vs Madhok Construction (P) Ltd) Paragraphs-12, 13, 14, 15, 27 & 30.
22. Mr. Saha emphasized in his argument that Section 4 of 1996 Act gives a right of waiver. On the facts of the case Mr. Saha contended that no notice was served upon the petitioner prior to passing of attachment order which was passed ex parte. Mr. Saha also relied on Section 11 of the Civil Procedure Code which is quoted below :-
"Section 11- Res judicata-No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court."
23. Mr. Saha further contended that there is no bar to make successive application as per Civil Procedure Code. In support of his contention Mr. Saha relied on a Supreme Court decision reported in 2004 (1) SCC Page-497 (Ramnik Vallabhdas Madhvani And Others vs Taraben Pravinlal Madhvani) Paragraph-55.
24. Mr. Saha further strongly urged that nomenclature is not important, but substance is. Therefore, in the 2nd application though filed under same Section 47 of Civil Procedure Code but substance was different. In support of his contention Mr. Saha relied on a Supreme Court decision reported in 1993 (2) SCC Page-507 (Chiranjilal Shrilal Goenka vs Jasjit Singh And Others)
25. Mr. Saha also contended that the opposite party's case is not a lack of jurisdiction but inherent lack of jurisdiction. Therefore, question of taking recourse to Section16, 34, 36, and 37 of the Arbitration Act, 1996 does not arise since the jurisdiction of the Learned Arbitrator was challenged in the petition.
26. Mr. Saha further contended that in case of execution of the award Civil Procedure Code applies. In support of his contention Mr. Saha relied on a Supreme Court decision reported in 2012 (1) SCC Page- 302 ( Leela Hotels Limited vs Housing And Urban Development Corporation Limited)Paragraph-45. Therefore, Mr. Saha submitted that Learned Civil Judge (Senior Division) 2nd Court, Barasat did not commit any wrong by allowing the second application filed under Section 47 of the Civil Procedure Code by deciding the issue of jurisdiction of the Sole Arbitrator.
27. In distinguishing the citations relied on by Mr. Bhattacharya, learned Advocate appearing for the petitioner Mr. Saha contended that 2007 (5) SCC 38 (supra) is not applicable in the case in hand. Actually circumstance is totally different in the case in hand. In the cited case already Section 34 was filed. Therefore, doctrine of estoppel applies. But here in this case of the opposite party it is totally different. But the case of the opposite party is not only on the point of lack of jurisdiction but also on the point of inherent lack of jurisdiction of the Sole Arbitrator appointed by the petitioner.
28. In case of 2014 (3) SCALE : Page-601 (supra) Mr. Saha relied on Paragraphs 2 and 3 and submitted that there parties appeared before the Arbitrator and thereafter challenged the jurisdiction but the opposite party's case is completely different. Therefore, 2014 (3) SCALE: Page- 601(supra) has no application in the case in hand.
DECISION WITH REASONS
29. After considering the submissions advanced by the learned Advocates for the parties and after perusing the records and the citations relied on by the learned Advocates I find that the Sole Arbitrator entered upon the reference and from time to time issued notices of sittings to both the parties. The petitioner appeared before the Learned Arbitrator but the opposite party did not appear before the Arbitrator on the ground that they have not given consent in the appointment of the Sole Arbitrator.
30. It is also evident that the opposite party did not take out any application before the Sole Arbitrator under Section 16 of the Arbitration & Conciliation Act, 1996 thereby challenging the competence of the Arbitrator on the ground that appointment was without their consent, nor they filed any application under Section 34 before the Hon'ble Court for setting aside the award though, Arbitration and Conciliation Act, 1996 provided for such remedies.
31. I accept the submissions advanced by Mr.Bhattacharya that award itself is not a decree and for its execution the award holder has to take recourse to Civil Procedure Code.
32. I also cannot ignore the proposition of law that Section 47 of the Civil Procedure Code cannot override the procedures provided under Section 5, 16, 34 of the Arbitration and Conciliation Act, 1996 and thereby entertain challenge to the award at execution stage.
33. I also cannot overlook the facts emerging from the records that the minutes of the every sittings were served upon the opposite party but despite receiving those minutes the opposite party chose not to appear before the Learned Arbitrator nor took any steps as provided under different sections of the Arbitration & Conciliation Act, 1996. They have waited till the award was passed.
34. It shocks the conscience of the Court that the Learned Court below after entertaining the application for execution and passed attachment order against the opposite party and further after rejecting the application under Section 47 of the Civil Procedure Code filed by the opposite party how could the Learned Court below allow the second application filed under Section 47 of the Civil Procedure Code by the opposite party thereby recalling the attachment order as well as holding that the award was invalid and in-executable when admittedly the Court below had no jurisdiction to entertain and decide any question as to the legality and validity of the award in any manner whatsoever.
Submissions of Mr. Saha also do not impress this Court that the filling of 2nd application under Section 47 of the Civil Procedure Code was not hit by the principles of res judicata though under Civil Procedure Code the opposite party has the right either to file an application before this Learned Court if they felt that all the issues raised in the earlier application under Section 47 of the Civil Procedure Code were not decided by the Learned Judge vide the earlier Order they should have preferred appeal from the said order.
35. This Court cannot also accept the argument advanced by Mr. Saha that though the second application was filed under Section 47 of the Civil Procedure Code but the substance of the matter was different from the earlier application though nomenclature was same. In my considered view if the substance of the 2nd application under the self- same section filed before the self-same Judge was different then what prevented the opposite party to take appropriate step against the earlier order passed by the Learned Court below in the first application under Section 47. While it is correct that there is no bar to file successive applications as per Civil Procedure Code before the self same Learned Court below but from the nature of the prayer of the first Section 47 application and 2nd Section 47 application it is noticed that the prayers in both the applications are almost same, therefore, when order was passed rejecting the first application of the opposite party, the opposite party ought to have challenged the said order in appeal instead of filing another application under Section 47 before the self-same Court.
The rights under Order II Rule 2 of the Civil Procedure Code was not secured but given up by the opposite party. In this regard Order II Rule 2 of the Civil Procedure Code and Section 11 as well as the Explanation (iv) of the Civil Procedure Code are quoted below :-
Order II Rule 2. Suit to include the whole claim-(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.
(2) Relinquishment of part of claim-Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.
(3) Omission to sue for once of several reliefs-A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.
"Section11 Explanation IV-Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit."
36. Now I deal with the judgments relied on by Mr. Saha. Dharma Praishthanam (supra) has been considered in case of M/s Larsen & Toubro Ltd vs M/s Maharaji Educational Trust and that Dharma Prashtishanam was quoted in the context whether appeal was maintainable or not and nothing else and the same does not fall within Section 37 of the Arbtiration and Conciliation Act, 1996. In that context some portion of the M/s Larsen & Toubro is quoted below : -
"It is, thus, clear that in order to invoke section 47 CPC, there must be a decree. Section 2 (2) CPC defines the decree. For a decision or determination to be a decree, it must necessarily fall within the fore-corners of the language used in the definition. Section 2 (2) CPC defines decree to mean "formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters incontroversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144, but shall not include- (a) any adjudication from which an appeal lies as an appeal from an order, or (b) any order of dismissal for default".
Explanation: A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary ad partly final.
"57-Section 36 of the Arbitration and Conciliation Act of 1996 brings back the same situation as it existed from 1899 to 1940. Only under the Arbitration Act, 1940, the award was required to be made a rule of Court i.e. required a judgment followed by a decree of court. The issue that an award made in arbitral proceedings is not a decree within the meaning of CPC having been settled by the aforesaid pronouncement by the Hon'ble Apex Court, the provisions of Section 47 CPC cannot be available to obstruct the execution of the award.
Much emphasis has been laid by the learned counsel for the applicant on the decision of the Hon'ble Apex Court in the case of Dharma Pratishthanam vs Madhok Constructions (2005) 9 SCC 686 wherein it has been held that in the event of appointment of an arbitrator and reference of disputes to him being void ab initio as totally incompetent or invalid the award shall be void and liable to be set aside in any appropriate proceedings when sought to be enforced or acted upon. However, the said case relied upon by the learned counsel for the applicant is distinguishable and will have no application in the facts of the present case. In the said case when the award was filed in the court for making rule of the Court under 1940 Act, objections were filed by the judgment-debtor under Section 30 of the said Act which were dismissed on the ground that they were filed beyond the prescribed period of limitation. The same can be inferred from the following observations made in Paragraph 32 of the judgment :
"In the present case, we find that far from submitting to the jurisdiction of the arbitrator and conceding to the appointment of and reference to the arbitrator Shri Swami Dayal, the appellant did raise an objection to the invalidity of the entire proceedings beginning from the appointment till the giving of the award though the objection was belated. In ordinary course, we would have after setting aside the impugned judgements of the High Court remanded the matter back for hearing and decision afresh by t he learned single Judge of the High Court so as to record a finding if the award is a nullity and if so then set aside the same without regard to the fact that the objection petition under Section 30 of the Act filed by the appellant was beyond the period of limitation prescribed by Article 119 (b) of the Limitation Act, 1963. However, in the facts and circumstances of the case, we consider such a course to follow as a futile exercise resulting in needless waster of public time. On the admitted and undisputed facts, we are satisfied, as already indicated hereinabove, that the impugned award is a nullity and hence liable to be set aside and that is what we declare and also do hereby, obviating the need for remand"
Thus having regard to the provisions of Sections 5, 12, 13, 16, 34, 35 and 36 of the Act, the irresistible conclusion is only grounds which can be pressed into service for challenge to an award is within the ambit and scope of Section 34 of the Act. Once the stage of Section 34 is over and the questions that were raised or could have been raised at that stage cannot be allowed to be raised again and again by pressing into service section 47 of the Code of Civil Procedure at the time of execution of award under Section 36 of the Act.
In view of the aforesaid facts and discussions, the applicant did not have any right to challenge the enforceability of the award by taking recourse to Section 47 CPC and the same were liable to be dismissed. It is altogether different question that the objections have been dismissed by the Court below on different grounds and reasons but since they are liable to be dismissed, the impugned order does not require any interference. The revision accordingly stands dismissed."
In case of 1993 (2) (SCC) 507 (supra) I find that decision was rendered in the context of a Probate Suit and not under 1996 Act.
The case in 2004 (1) SCC Page-497 Para-55 dealt with the question of inherent lack of jurisdiction and the Judgment was rendered only in the context of Civil Procedure Code and there was no scope to consider Arbitration & Conciliation Act, 1996. But I find law has been settled when MSP Infrastructure (supra) came into force. 1991 SCC Page 193 (supra) also restricted in the context of Civil Procedure but not in Arbitration Act, 1996. Zenith Fire Services (supra) , Leela Hotels (supra) held that award should be enforced under Section 36 by following Civil Procedure Code. Therefore, at the time of execution of the award there is no scope to challenge the award itself by taking recource to Section 47 of the Civil Procedure Code. Mr. Saha distinguishing the 2007 (5) SCC 38 (supra) submitted that Judgment was considered in Leela Hotel's case.
Analysing the decisions cited by Mr. Bhattacharyya, learned Senior Advocate appearing for the petitioner, it appears that law is now well settled that once an award is passed by the Arbitrator, any party aggrieved by the award has to challenge the award in accordance with the procedures provided under Arbitration & Conciliation Act, 1996 including the issue relating to the jurisdiction of the Arbitrator, which such issue however, should be raised before the Arbitrator under Section 16 of the Act, 1996. Therefore, a party, aggrieved by the award, not having taken any of the measures provided in the Act, 1996, is debarred in law to challenge the validity or legality of the award at the execution stage when such award is put into execution under Section 36 of the Act, 1996. Thus, the applications filed by the opposite party under Section 47 of the Code of Civil Procedure challenging the legality and/or validity of the award on diverse grounds, were not maintainable, consequently the Civil Judge (Senior Division) ought not to have entertained those applications but should have rejected the same being not maintainable in law. Thus, the submissions advanced by Mr. Saha, learned Senior Advocate for the opposite party, supporting the order passed on the application filed by the opposite party under Section 47 of the Code of Civil Procedure, are devoid of any merit and contrary to law.
Admittedly the present proceeding relates to execution of an arbitral award and not a decree of a civil Court. Subtle distinguishing features are there between the execution of a decree of a Civil Court and the execution of an award. In the instant case the award under execution was not challenged in accordance with law before appropriate forum, of course executability of an award can be challenged or assailed in execution proceeding but not legality and invalidity of the award. In this case admittedly an earlier application under section 47 of the Code of Civil Procedure was dismissed. It does not appear from the records available before me that such order of dismissal was challenged in accordance with law before appropriate forum. Therefore, the issue raised regarding executability of the award reached its finality and the same cannot be reopened in a round about way. It has been held in the case of Satyadhan vs Smt. Deoragin reported in A.I.R (1960) S.C Page 941, 943 that principle of resjudicata applies even when a case does not fall under Section 11 of the Code of Civil Procedure.
The Principle of resjudicata shall apply to achieve finality in litigation when Section 11 does not apply in terms. It has been held in the case of Steel Authority of India, reported in A.I.R (1985) Orissa 224, Principles of resjudicata are applicable in arbitration proceeding.
It has been held in the case of Arjun Singh vs Mahendra Kumar, that Principle of resjudicata applies in two stages in the same proceeding, a point once decided by the Court cannot be allowed to be re- agitated. Such point cannot even be collaterally attacked at a later stage.
In case of Sulachana Amma vs Naraynan Nair reported in 1994 (2) SCC 14 it was held that Section 11 will apply to all judicial proceedings whether civil or otherwise. Keeping in mind, the executing court cannot go behind the decree but the executing court can consider the pleading and the proceeding to find out the true effect of the decree as held in the case of Bhavan Vaja and others vs Solanki Hanuji Khodaji Mansang and another reported in AIR (1972) Page- 1371, reference may also be made in the case of Topanmal Chhotamal vs M/s Kundomal Gangaram and Others reported in AIR 1960 Page- 388 holding that the executing court must take the decree as it stands. It has been held in the case of Bijali Bala Das vs Charu Bala Ash reported in A.I.R 1969 Patna 21 that once an objection under Sec 47 of Code of Civil Procedure is rejected by the executing Court, fresh objection on a different plea is barred by constructive resjudicata. It is true that Section 47 of CPC relates to all question as to the execution, discharge and satisfaction of a decree and not by a separate suit but at the same time it does not mean Section 47 permits denovo trial or adjudication.
In my considered view the impugned order passed in 2nd application under Section 47 is without jurisdiction .
37. I have no hesitation to hold that impugned order in 2nd Application filed under Section 47 of the Civil Procedure Code was passed by the Learned Civil Judge (Senior Division), 2nd Court Barasat bye passing the entire mechinaries of the Arbitration & Conciliation Act, 1996 provided under Section 4, 5, 13, 16, 34, 35 of the said Act and that the impugned order was without jurisdiction.
38. In the light of the above discussions I set aside and quash the impugned order No.28 dated 29.09.2015 passed by the Learned Civil Judge (Senior Division) 2nd Court Barasat and direct the Learned Court below to proceed with the execution application expeditiously. Needless to mention that by reason of this order attachment order earlier passed stands revived.
39. Considering the facts of this case and the conduct of the opposite party indulging in filing frivolous applications thereby stalling the execution of a valid Award obtained by the petitioner, the petitioner has been harassed by and at the behest of the opposite party in realising the amounts under the award, the opposite party should pay the costs of this application to the petitioner which is assessed at Rs.20,000/- within a fortnight from date, failing which, the petitioner shall be entitled to execute this order in accordance with law.
40. Accordingly the revisional application is allowed.
40. Urgent photostat certified copy of this judgment, if applied for, be supplied to the parties after fulfilling all the formalities.
(Samapti Chatterjee, J) Later, 27.04.2016
41. After delivery of the Judgment Mr. Saha prayed for leave of this Court to challenge the order passed on the first application under Section 47. This Court is of opinion if the opposite party is entitled in law to challenge the said order for that leave of this Court is not necessary.
Mr. Saha also prayed for stay of operation of this order. The prayer is entertained and refused.
(Samapti Chatterjee, J)